THQ to be sold piecemeal, Warner Bros., EA, Ubisoft looking to buy

You may remember recently when we learned that THQ had entered Chapter 11 bankruptcy with a stalking horse bidder in Clearlake Capital - giving them the opportunity to continue working while managing their debt. As noted by Distressed Debt Investing however, a number of people were not happy with the way that was going down and two complaints were filed with the courts - one by Roberta DeAngelis - the US Trustee overseeing the sale - and another by a group of creditors, including Warner Bros.


Ubisoft presents?

It seems THQ were rigging the deck to ensure everything went straight to Clearlake Capital - understandably, as that would effectively mean no real changes at the company. The amount of time alotted to bid (originally until January 9th) was not long enough and the way THQ was being sold - as an entire company instead of as separate entities - made it less than enticing to potential bidders. As the creditors' complaint says:

“Rather than being designed to maximize the value of the Debtors’ estates, the Bidding Procedures, by design or otherwise, render the “auction process” meaningless and virtually guarantee that Clearlake will be the ultimate buyer, thereby ensuring that the Debtors’ management retain their positions within, and operating control over, the Debtors’ organization.”

US Bankruptcy Judge Mary Walrath agreed with the creditors, and now the various franchises and IPs are to be sold separately, with Warner Bros. and apparently EA and Ubisoft looking to purchase various parts of the company at an auction now being held on the 22nd of January - although not all assets will be up for grabs. It will be interesting to see how this turns out, but one thing is apparent - THQ will not be the same come January 23rd.